The Cost Factor in Patent Systems

Abstract

The objective of this paper is to assess whether and to what extent the cost of patenting affects the demand for patents. The empirical analysis, which focuses on the patent systems of the USA, Japan, and Europe during the year 2003, leads to the following methodological and empirical observations: i) after the grant, the translation, validation and transaction costs induced by an effective protection in several European countries witness a highly fragmented and very expensive European market for intellectual property; ii) for a proper international comparison, the size of the market and the average number of claims must be accounted for; iii) when the cost per claim per capita (the 3C-index) is considered, a negative linear relationship appears between the cost of patenting and the number of claims that are filed; iv) for a patent designating 13 European countries, the 3C-index is about 10 (2) times higher than in the US (Japanese) system (for process and translation costs up to the grant); v) The European market being more than twice as large as the US market in terms of inhabitants, the 3C-index suggests that there would be a clear justification for higher nominal examination fees at the EPO, that would ensure a rigorous granting process.

The puzzle of patent value indicators

“…6 Indeed, non granted patents have by nature limited private value to their owner as they can hardly be enforced, and the main costs for patent applicants (at least in the European patent system) are incurred once the application is granted and needs to be translated and validated in each designated Member State (see François (2009) andvan Zeebroeck (2008)). …”

When small is beautiful: Measuring the evolution and consequences of the voluminosity of patent applications at the EPO

“…On top of this procedural cost, patent voluminosity also has an important financial cost for patent systems, at least in terms of handling, printing and shipping the documents themselves, together with the cited prior art, both to the applicant and -in case of an application following the PCT route -to the WIPO, as well as in terms of translation when they are finally granted and become validated as national patents. Since it has indeed been observed by van Pottelsberghe and François (2006) that translation costs represent an important part of the total cost of a European patent, it is to be expected that such costs will increase in absolute terms for longer texts to be translated.…”

The London Agreement and the cost of patenting in Europe

“…Expenses associated with the patent granting process and with patent maintenance can be decomposed into four categories (van Pottelsberghe and François, 2006): common language with the EPO (8) no common language with the EPO (7) Signatories of the LA (15) 1. Procedural costs are composed of fees payable to the patent office up to grant, namely: filing fees, search fees, patent publication fees, examination fees, grant fees (for issuing a patent) and validation fees 9.…”

“…The adopted simulation methodology is based on the one put forward by van Pottelsberghe and François (2006). Relying on the data presented by Harhoff et al (2008) Due to the existence of different filing routes and differences between patent office fee structures, the following working hypotheses are made:…”

“…This ranking may however be biased in two main respects (cf. van Pottelsberghe and François, 2006). First, patent size (in term of the average number of claims included in a patent) varies substantially across regions.…”